If profits start to plateau what should business owners do?
By Guest Contributor Karen Dunne Squire
We hear from Karen Dunne Squire from Elation Experts on what to do if you business profits start to plateau.
When you conjure the ideal image of your business it may well centre on a healthy graph showing organic, steady growth and comfortable, sustained profits. If this is the ideal, I may be about to disappoint you as in my experience it is hard for this to happen without the complexity of acquisitions or mergers. Businesses who rely on achieving growth by increasing output always, at some time, hit the dreaded plateaux. They grow effectively for a number of years; they achieve this as they have a solid offering, they are delivering some proactive engagement with their market, they work hard, and they close sales.
Inevitably at some point the growth slows down. The practices and processes internally within the business reach their saturation point. They cannot achieve any more sales without doing things differently and all the small changes they make stop yielding results. At this point the organic growth that the business is capable of has stopped delivering what the business needs. It’s time to think about something new and if you are not inspired by growth through merger or acquisition you need a new idea to generate dynamic growth.
Dynamic growth is about constant change. It’s about stimulating different results by taking new action, and it’s what needs to happen when you reach a profit plateau. Over the last 10 years I have been working on defining the characteristics of highly successful businesses to understand how they harness growth.
When you are thinking about what you need to do to build a dynamic approach to business growth there are three key pillars to focus on. These will help you to make the changes to your business that will ensure you move upward from the plateau.
PILLAR ONE: YOUR CUSTOMER JOURNEY PILLAR
The experience that your customer has when they work with your business is everything. You have a responsibility to shape a journey that not only educates your customer on the value of your offering, but also ensures that they experience your business as credible and professional.
Really robust businesses, that exceed their own growth expectations, have very diverse and well-planned customer journeys; they consider carefully the stages through which their customers travel and the impact that that has on their decision-making journey. As well as a highly tuned customer experience they have internal processes that create productivity and efficiency.
When understanding the challenges of a plateau to business growth the first place to focus is on the detail of your customer sales process. A well planned and diverse customer journey that your team implements effectively will be sure to maximise your conversion rate/ revenue generation.
Dynamic businesses will be thinking today about specifically what experience their customer has when dealing with their business and will be asking questions about how to enhance the quality and content of that journey. Really high quality sales process methodology will allow your business to draw in more customers and make more revenue and ultimately generate more profit.
Your task: Put time into interrogating the experience that customers have when working with you. What are the stages that they move through? Is the way that you and your team interact with your clients well defined and diverse? Is their experience one of consistently high quality? Unless the journey your customers undertake is smooth and effective your business will be losing money.
PILLAR TWO: YOUR CUSTOMER COMMUNICATION PILLAR
The customer communications pillar within your business deals with every communication that your customer is exposed to and looks at how it impacts their decision-making. As the range of channels increases and we have ever more marketing and sales communications to explore, a smart business will look closely at its communications pillar.
Whether it be the software you use to generate proposal, the quality of the telephone calls that your sales team are making to your customers, or the business cards you handout at face-to-face events, a really strong communication pillar embraces multiple channels and creates high quality guidelines around how these channels are to be used.
It is not simply a case of using email, it is a case of crafting an email that has a powerful impact within the sales communications pillar. Never take your eye off the content, structure, tone and delivery of every sales and marketing activity that comes out of your business. The message here is that if your communications to your customers are not of the highest possible standards, you will not be achieving the highest possible results.
Your task: Make sure that you evaluate your customer communications. Go back to basics. Look at all your communications and check them for quality. Setup clear communications guidelines and make sure that your entire team is across them and implementing them.
PILLAR THREE: YOUR PEOPLE MANAGEMENT PILLAR
The management area of your business refers to the processes and practises that your organisation uses to ensure that your customer journey is implemented to the highest possible standard. Within the area of management, you need to look at the structure of your organisation to ensure you have the right number of resources and that each person is working in the right fit in the right role. That way all the resources can be lined up behind the customer journey so that it can be delivered to the highest standards.
Once you’re clear that the people in your team are right, you then need to be thinking about how those people communicate with one another internally. Think about how you train and develop those resources to ensure they have the highest possible skill set; understand how performance is managed in an organisation to ensure that everyone is driving towards the right goals and achieving the right targets. All of these areas of your organisation come together to form the management culture that is shaping your business.
If you are focused on ensuring that your people are in an environment where they can perform to their maximum you will achieve better results. So, really dynamic businesses are asking; is my workforce well trained, well recruited and well developed? If the answer to any of those questions is no, it’ll have a negative impact on the amount of money you’re generating.
Your task: Review all the members of your team. Are they the right fit? Are they where they can best perform and let their skills truly shine? Is additional training required? Are they all aligned with the vision for the business?
As a business owner or leader having the tools to drive constant growth in your organisation is one of the most powerful skills you can develop. If you want to beat the fear of your revenue slowing and profits stalling look at these three areas and with honesty and clarity interrogate how dynamic you are being.
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Strategy is a plan of action designed to achieve a long-term or overall aim, and there are many areas in business where a decent strategy will be of value. Strategy is not complex, but it can be hard, because of the pain of having to make choices.
In this practical guide, bestselling author Kevin Duncan offers intelligent and quick solutions to tricky business issues through smart strategic thinking and action. He provides 50 smart ideas to help you arrive at your solution (and present it in a way that everyone can understand!).
ABOUT THE AUTHOR
Karen Dunne-Squire is founder of Elation Experts, which is on a mission to empower SME’s by giving them the knowledge and skills to increase revenue, build powerful sales opportunities and create committed, loyal teams that are motivated to drive change. Karen is a sought-after keynote speaker and creator of The Growth Framework, an award-winning methodology, applying ‘Big Business Corporate Insights’ to SMEs in a way that makes practical sense for them.